The move by data-protection authorities from Britain, Germany, France, Italy, Spain, and the Netherlands is the first co-ordinated and formal procedure by EU states against a single company on privacy, underscoring European frustration with Google.

European watchdogs can currently impose only fines below €1m but new EU-wide rules could soon empower them to inflict on companies penalties up to 2 per cent of their global annual turnover.

In Google’s case that would add up to about $760m, based on its 2011 revenues. The new rules could be approved by the end of this year by EU lawmakers and member states.

The move comes five months after a probe led by CNIL, the French watchdog representing EU regulators, concluded that Google had failed to give users adequate information about how their personal data were being used across its multiple platforms.

Google responded that its privacy policy respected European law. “We have engaged fully with the data-protection authorities involved throughout this process, and we’ll continue to do so going forward,” it said in a statement.

The Mountain View-based group has faced intense criticism for its privacy policy since it first moved to merge customer data held across its various services such as Gmail and YouTube, which alone holds the data of more than 1bn users.

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The US group said its new privacy terms, which combine 60 former policies into one for all its customers, would allow it to provide a better service. Google Now, which provides intuitive updates based on calendar entries, location patterns and emails, is one example of a service making use of the new approach.

“It is good to see that six national data-protection authorities are teaming up to enforce Europe’s common data-protection rules,” said Viviane Reding, EU commissioner for justice. “I am confident that the European Parliament and the EU member states will strengthen Europe’s enforcement tools substantially in the course of this year.”

EU privacy officials have also criticised aggressive US lobbying on behalf of Google and Facebook to relax new privacy laws being considered by Brussels.

The news comes a day after Google confirmed that its privacy director, Alma Whitten, was leaving after nearly three years in the role.

Ms Whitten was appointed in 2010 after Google admitted that its Street View cars had been recording data from the unprotected WiFi networks of homeowners, for which it paid CNIL a €100,000 fine. Lawrence You, a member of Google’s privacy team, will take over the role.

Google said the move was unrelated to actions by the EU regulators.

The company is also fighting EU competition authorities over the prominence of its own products in Google search results.

Last week Microsoft published, through a consultant, findings of a survey showing that Google’s competitors were being disadvantaged by sitting lower in search results than Google’s own services in areas like shopping and travel. On March 21 2011, complainants in that investigation published an open letter to, Joaquín Almunia, EU vice-president, urging him to take action.

Nick Pickles, director of Big Brother Watch, a UK privacy campaigner, said: “Google has repeatedly put profit ahead of user privacy . . . It is essential regulators find a sanction that is not just a slap on the wrists and will make Google think twice before it ignores consumer rights again.”